The exquisite efficiency of nature's catalytic machinery has long been the envy of organic and bioorganic chemists. Although many natural enzymes have proven useful in synthetic applications, expansion of this repertoire to include custom-tailored catalysts remains of an area of active research. Yet despite remarkable advances in the understanding of protein structure and function, de novo design of synthetic peptide catalysts remains elusive. The studies proposed here provide a blueprint for construction of catalysts directed at reactions of chemical and biological importance: amide bond formation and hydrolysis of carboxylic esters and amides. The proposed research plan builds on our recent design of an efficient 33-residue synthetic peptide ligase that displays catalytic efficiencies [(K/cat/K/m/K/uncat] in excess of 10/5. The artificial ligase exhibits rate accelerations of up to 4100-fold in the template-directed ligation of two peptide fragments- far in excess of any system of any system previously described for catalysis of templated bimolecular reactions. The present design provides both a mechanism for understanding effective catalysis in aqueous milieu, and a framework for the design of novel catalysts with varied catalytic function. The specific aims of the proposed research program are: I. Improved understanding of the factors that contribute to the observed catalytic efficiency of the first-generation peptide ligase. II. Design, synthesis, and characterization of second-generation ligases which incorporate reactive functional groups. III. Design, synthesis, and characterization of third-generation ligases and hydrolases based on alpha-helical hairpin folding motifs. Selection and optimization of catalytic function through directed phage-display libraries.